The GAC Aion Hyper SSR electric sports car is on display during Auto Guangzhou 2023 at the Pazhou China Import & Export Exhibition Complex in Guangzhou, Guangdong Province, China, on November 17, 2023.
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Chinese automakers are expected to continue expanding rapidly outside their home countries to reach a 33% share of the global automotive market by 2030, according to a new report released Thursday by leading consulting firm AlixPartners.
Much of the growth, from a forecast of 21% market share this year, is expected to come outside of China. Sales outside China are expected to grow from 3 million this year to 9 million by 2030, representing growth from 3% to 13% market share by the end of this decade.
The rapid expansion of Chinese automakers is a concern for legacy automakers and politicians around the world. Many fear that cheaper Chinese-made vehicles will flood the market, undercutting domestically produced models, especially electric vehicles.
AlixPartners said the Chinese brand will grow in all global markets. However, the company added that it expects smaller expansion in Japan and North America, including the US, where vehicle safety standards are stricter and a 100% tariff on imported Chinese EVs has been announced.
“China is the new disruptor in the industry – it can create must-have vehicles that are faster to market, cheaper to buy, more advanced in technology and design, and more efficient to build,” said Mark Wakefield, global head of automotive and industry. practice in AlixPartners, said in a statement.
In North America, Chinese automakers are forecast to gain only a 3% market share, mostly in Mexico, where one in five vehicles is expected to be a Chinese brand by 2030. In most other major regions of the world, AlixPartners reports that the market share of Chinese automakers it is expected to grow exponentially. These regions include Central and South America, Southeast Asia and the Middle East and Africa.
Chinese brands in China are also expected to grow from 59% to 72% in market share, according to AlixPartners. Legacy car manufacturers such as General Motors has lost importance in China in recent years amid the rapid rise of China’s domestic automotive industry and companies such as BYDGeely and Neo.
A model displays Chinese automaker BYD Song MAX electric car at the 45th Bangkok International Motor Show 2024 in Nonthaburi Province, on the outskirts of Bangkok, Thailand, on March 30, 2024.
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In Europe, where Chinese automakers have grown rapidly in recent years, the market share of Chinese automotive brands is expected to double from 6% to 12% by 2030, according to AlixPartners.
Chinese automakers are thriving because they have cost advantages, a local production strategy that will make them sell everywhere in non-Chinese markets, and vehicles with technology that matches consumer preferences for design and evolving freshness. report.
“Automakers expect to continue to operate under business-as-usual principles, more than just a rude revival — they’re going to be obsolete,” Andrew Bergbaum, global leader of the automotive and industry practice at AlixPartners, said in a statement. .
Chinese EV carmakers build new products in half the time of older carmakers – 40 months vs 20 months – mainly by designing and testing them to meet standards that equate to overengineering. They also have a 35% “Made-in-China” cost advantage.
Wakefield said that in order for traditional automakers to compete with Chinese automakers, they need to rethink their business development processes and the pace of vehicle development.
